State Medicaid spending dropped to nearly zero in March as the Cuomo administration again delayed payments to superficially balance the state’s books.

Comptroller Tom DiNapoli’s cash report for March, posted on Wednesday, showed just $9.2 million in Medicaid disbursements. The state’s share of Medicaid spending averages almost $2 billion per month. The comptroller’s numbers reflect so-called Department of Health Medicaid, which covers the bulk of the program but excludes most spending on recipients with mental disabilities.

DOH Medicaid spending for the fourth quarter of the fiscal year was down by more than $2 billion from the third quarter, continuing the erratic pattern of recent years.

medicaid-quake-7081639
Source: New York State Division of the Budget, Office of the State Comptroller (click to enlarge)

The maneuver appears to be a repeat of spring 2019, when the state delayed $1.7 billion in Medicaid payments owed to health-care providers and managed care plans from late March to early April.

That transaction – driven by undisclosed spending overages in the Medicaid program – was not made public until weeks after it happened. It threw the newly enacted state budget out of balance and led to what became a $4 billion deficit in the state’s Medicaid budget.

Cuomo’s plan to close that gap included drawing from stronger-than-expected tax receipts, enacting cost-cutting recommendations from his Medicaid Redesign Team and continuing to defer payments into future fiscal years. This time, the delay was done with advance notice and tacit approval of the Legislature.

Such delays are considered bad fiscal management because they disguise the true amount of state spending and raise the risk of cash-flow problems over the long-term.

In spite of skipping a whole month’s worth of payments, state Medicaid spending ended the 2019-20 fiscal year at $23.2 billion, which is 14 percent higher than the year before.

It’s also about $1.5 billion or 6 percent over what the state projected it would spend in January’s update to the financial plan – a sign that the Cuomo administration’s struggles to control Medicaid spending have continued.

 

About the Author

Bill Hammond

As the Empire Center’s senior fellow for health policy, Bill Hammond tracks fast-moving developments in New York’s massive health care industry, with a focus on how decisions made in Albany and Washington affect the well-being of patients, providers, taxpayers and the state’s economy.

Read more by Bill Hammond

You may also like

How a Medicaid Program To Improve Nursing Home Care Ended Up Paying for Union Benefits

New York State's budget-making process sometimes works like a closed loop, as interest groups on the receiving end of state spending reinvest a portion of their proceeds to lobby Albany for still more money. Read More

How Eliminating the Medicaid ‘Gap’ Would Perpetuate Inequity in Hospital Funding

A change in Medicaid reimbursement currently being pushed by New York's hospital industry appears likely to benefit high-end hospitals proportionally more than safety-net institutions, a review of hospitals' financial repor Read More

Hochul’s ‘Straight Talk’ on Medicaid Isn’t Straight Enough

Arguably the biggest Medicaid news in Governor Hochul's budget presentation was about the current fiscal year, not the next one: The state-run health plan is running substantially over budget. Read More

Despite Lingering Shortages, New York’s Health-Care Workforce Is Bigger Than Ever

The state's health-care workforce is recovering unevenly from the pandemic, with persistently lower employment levels in some areas and robust growth in others. This mixed pattern c Read More

In a Tight Budget Year, New York’s Hospital Lobby Shoots for the Moon

As Governor Hochul calls for spending restraint next year, influential hospital lobbyists are pushing what could be the costliest budget request ever floated in Albany. In a , the G Read More

Putting the Mission in Hochul’s Health Commission

Last week Governor Hochul answered one big question about her Commission on the Future of Health Care – the names of its members – but left a fundamental mystery unresolved:  W Read More

Medicaid Drug ‘Carve-Out’ Led to Double Payments

The state's Medicaid program has effectively been double-paying for prescription drugs for the past six months due to a glitch with the roll-out of its pharmacy "carve-out." Since A Read More

DeRosa Is Still Hiding the Truth About Cuomo’s Pandemic Response

As the long-time top aide to former Governor Andrew Cuomo, Melissa DeRosa ought to have useful information to share about the state's pandemic response – especially about what went wrong and how the state could be better Read More